On May 29, 2020, President Trump proclaimed June 2020 as National Homeownership Month. As the nation recovers from the effects of the COVID-19 pandemic, HUD and the Federal Housing Administration (FHA) continue to direct support and resources toward homeownership â€“ for both new homebuyers and those individuals and families who are struggling to keep their homes.
We are keenly aware of our responsibility to play a countercyclical role in supporting the housing market during times of both financial challenge and natural disasters. During this national Homeownership Month and beyond, HUD, its Office of Housing, and FHA are committed to helping first-time homebuyers and other families attain the financial benefits and economic independence realized through homeownership.
Helping Struggling Homeowners
We are helping homeowners with FHA-insured mortgages who are struggling to make their mortgage payments as a result of the COVID-19 pandemic by:
- Requiring mortgage servicers to offer up to six months of forbearance initially, and up to 12 months if needed, when the borrower requests this assistance;
- Providing through mortgage servicers a special COVID-19 National Emergency Partial Claim, a home retention solution that helps homeowners bring their mortgages current, without requiring a lump sum payment, by putting past due mortgage amounts into a special junior lien that is only repaid when the mortgage is extinguished. For most homeowners, this is when they refinance or sell their home.
- Making special allowances for seniors with Home Equity Conversion Mortgages by extending mortgage servicing timelines and due dates, including those for payments of taxes and insurance.
- Assisting consumers with their finances through HUD-Approved Housing Counseling Agencies with virtual meetings with counselors who can help them navigate these current times.
- Halting foreclosures and evictions for over 8.2 million FHA-insured single family properties through June 30, 2020;
Supporting the Housing Market
Throughout its history, FHA has played a countercyclical role in supporting the nationâ€™s housing market during times of economic challenge. While todayâ€™s situation is different than others, the importance of our role remains the same.
We are ensuring that lenders, servicers, housing counselors, and others have the options in place to continue with FHA business for the nationâ€™s homebuyers needing FHA-insured affordable mortgage financing by:
- Initiating temporary policy flexibilities that remove the need for in-person or onsite contact for work usually required for new mortgage originations through June 3.
- Modifying our FHA Catalyst technology modernization approach to quickly deliver state-of-the-art capabilities that support lenders and servicers with paperless solutions for previously manual processes.
- Ensuring that manufactured housing manufacturers can use alternative sources for windows without a lengthy approval process, keeping the supply of this affordable housing source moving.
- Providing reporting and other flexibilities for HUD-approved housing counseling agencies, so they can continue their vital work in preparing families for homeownership, facilitating Home Equity Conversion Mortgage counseling with seniors, and assisting those in danger of foreclosure make the decisions that are right for them.
- Providing virtual assistance to first-time homebuyers with homebuyer education workshops provided by HUD-approved Housing Counseling Agencies so they can qualify for down payment assistance programs in their communities.
Fulfilling Our Vital Role for First-Time Homebuyers, Underserved Borrowers, and Victims of Natural Disasters
FHAâ€™s role in helping first-time homebuyers and others has never been more important. As a main source for ensuring the availability of affordable mortgage credit to qualified homebuyers, we:
- Served over 615,000 first-time homebuyers in FY 2019, over 82%1 of our single family insurance volume;
- Are one of the largest drivers of affordable homeownership for minority borrowers, insuring mortgages for more than 245,000 minority borrowers in FY 2019, over 33%1 of our total single family insurance volume. This is more than 30% of the total number of minority borrowers obtaining mortgages in Calendar Year 2018; and
- Continue to provide relief to homeowners devastated by Hurricanes Harvey, Irma, Maria and other natural disasters.
1. Single Family forward mortgage purchase transactions.
Supporting Safe, Sustainable, and Affordable Homeownership
HUD's Office of Housing and FHA are the drivers behind the nationâ€™s safe, sustainable, and affordable homeownership:
- Over 1,700 HUD-approved housing counseling agencies counseled over 1 million clients in 2019, helping these clients make the rental, homebuying, foreclosure avoidance and financial choices that were right for them. In FY 2019, HUD awarded nearly $43 million in grants to Housing Counseling agencies.
- To support HUD-approved Housing Counseling Agencies in counseling clients during the COVID-19 pandemic, the Office of Housing Counseling developed and provides resources for both counselors and consumers.
- HUDâ€™s role in overseeing the safety of manufactured home manufacturing and installation included proposing a sweeping set of regulatory changes, including requiring carbon monoxide detectors in many circumstances, while eliminating unnecessary regulatory barriers to production.
- To ensure continued supply of manufactured housing during the COVID-19 pandemic, HUD extended the license renewal period.
As one of the largest mortgage insurers in the world, FHA has active insurance on over 8.2 million single family mortgages with an unpaid principal balance of over $1.25 trillion. In Fiscal Year 2019:
- The average forward mortgage amount of FHA insurance endorsements was $216,695;
- The average Maximum Claim Amount on Home Equity Conversion Mortgages was $347,275;
- The average borrower credit score on FHA-insured mortgages was 666; and
- The Average Debt-to-Income Ratio for Purchase transactions was 43.67%.